19 August 2006

Obscuring and entrenching our irrationality

Filmmaker Michael Moore happened to note on CBS' popular 60 Minutes last year that “the chances of any of us dying in a terrorist incident is very, very, very small.” His interviewer ... promptly admonished, “But no one sees the world like that.” Both statements, remarkably, are true — the first only a bit more so than the second. It would seem to be reasonable for someone in authority to try to rectify this absurdity. In [risk analyst Howard] Kunreuther’s words, “More attention needs to be devoted to giving people perspective on the remote likelihood of the terrible consequences they imagine.” That would seem to be at least as important as boosting the sale of duct tape, issuing repeated and costly color-coded alerts based on vague and unspecific intelligence, and warning people to beware of Greeks bearing almanacs.

This, and the other quotes in this post are from John Mueller's, A false sense of insecurity (pdf).Is there a case to be made for valuing deaths caused by terrorism more highly than those caused by, say, road accidents? There may be, but it is not made. Yet:

...an American’s chance of being killed in one nonstop airline flight is about one in 13 million (even taking the September 11 crashes into account). To reach that same level of risk when driving on America’s safest roads — rural interstate highways — one would have to travel a mere 11.2 miles.

Media attention and consequently public resources are overwhelmingly devoted to the terrorist risk, while something like 900 000 people die on the world's roads every year. As so often, policy is made according to an agenda dictated by visual imagery, fear and irrationality. I don't think there would be anything necessarily wrong with this, provided we did it knowingly, explicitly and with our eyes open. If society truly believes it's worth, say, destroying the airline industry - which could happen if there were another 9/11 disaster - because we'd rather 10x people die on the roads than x people die through terrorism, then let us be transparent and say so when we make resource decisions. Unfortunately obscurity is built into the current policymaking system. We fund institutions and activities, which all sound good and well-meaning and highly principled. But the outcomes that result are perverse. And even more unfortunately, these outcomes can be self-reinforcing, creating and enriching government agencies or corporate bodies, giving them the muscle to oppose any move to wind them down. So, decades after it was known that, to take just one example, farm support policies are economic nonsense, socially inequitable and environmentally disastrous, these programmes persist, at great cost to everybody except a few well-padded landowners and agribusiness corporates. Anti-terrorist measures look like going down the same path:

What we need is more pronouncements like the one in a recent book by Sen. John McCain (R-Ariz.): “Get on the damn elevator! Fly on the damn plane! Calculate the odds of being harmed by a terrorist! It’s still about as likely as being swept out to sea by a tidal wave. Suck it up, for crying out loud. You’re almost certainly going to be okay. And in the unlikely event you’re not, do you really want to spend your last days cowering behind plastic sheets and duct tape? That’s not a life worth living, is it?”

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3 May 2012: An audio talk by Nobel Prize winner Professor Robert Shiller at the London School of Economics, in which Social Policy Bonds are briefly mentioned, is available here.